Transcribed image text: P12-1 (Static) Preparing a Statement of Cash Flows (Indirect Method) LO12-1, 12-2, 12-4, 12-6 Sharp Screen Films, Inc., is developing its annual financial statements at December 31, current year. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statement are summarized as follows: Current Year Prior Year Balance sheet at December 31 Cash $ 73,250 $ 63,500 Accounts receivable 15,250 21,350 Merchandise inventory 23,450 18,000 Property and equipment 209,250 160, 350 Less: Accumulated depreciation (52,450) 45250 5263.750 5217,450 Accounts payable 5 16,500 $ 19,000 Wages payable 2,000 2,700 Note payable, long term 56,100 71,000 Common stock and additional paid in capital 103,950 65.900 Retained earnings 85,000 58,850 $269, 250 $217.450 Income statement for current year Sales 5205,000 Cost of goods sold 123,500 Depreciation expense 11,700 Other expenses 43,000 Net Income $26.800 Additional Data: a Bought equipment for cash, $48,900. b Paid $14,700 on the longterm note payable c. Issued new shares of stock for $38,050 cash Dividends of $650 were declared and paid e Other expenses all relate to wages Accounts payable includes only inventory purchases made on credit, SHARP SCREEN FILMS, INC. Statement of Cash Flows For the Year Ended December 31, Current Year Cash flows from operating activities: Adjustments to reconcile net income to net cash provided by operating activities 0 0 Cash flows from investing activities 0 Cash flows from financing activities: 0 $ 0 a. Bought equipment for cash, $48,900. b. Paid $14,700 on the long-term note payable. c. Issued new shares of stock for $38,050 cash. d. Dividends of $650 were declared and paid. e Other expenses all relate to wages. f. Accounts payable includes only inventory purchases made on credit